Byline: Laura Klepacki

NEW YORK — After three years of double-digit growth, nail color sales are losing their luster.
At midyear, dollar sales had fallen about 3 percent, according to figures provided by industry sources. First signs of a market shift came in the fourth quarter of 1998, when sales flattened; still, the category ended the year ahead 13 percent to about $400 million.
But as manufacturers and retailers ready fall promotions, it’s clear the market has peaked, and that fact is of no small significance for mass beauty.
Nail color is credited with igniting the mass color cosmetics category, which had stagnated during a several-year trend to neutral tones.
Triggered by the 1995 launch of Chanel’s Vamp, a reddish black shade, nail polish was embraced as a form of self-expression by women and the category turned around. Mass manufacturers responded with exploding shade ranges; blue became as popular as pink.
Nail color sales in 1996 jumped 15 percent, followed by an explosive 28 percent growth the following year. Nail polish helped draw consumers into departments and spawned a resurgence across other color categories.
Women could experiment with deep blue lipstick and silvery white eyeliner. Even hair color benefited from women’s interest and willingness to experiment with color. Several new lines with daring shades were launched, such as L’Oreal’s Feria and Revlon’s Super Lustrous.
The slowdown now comes as no surprise to the industry. Most manufacturers said that kind of growth would be impossible to maintain and the downturn reflects the cyclical nature of cosmetics. And thus far, industry executives don’t seem overly concerned.
“There has never been anything that has shown year-in and year-out double-digit increases,” said Ellen Genco, director of marketing at Orly. “It is still a very healthy market.”
Yet according to sources, the decline hasn’t been across the board. Drugstore retailers have taken the hardest hit, with a 10 percent drop in sales for the 52 weeks ended June 30, while discounters’ volume actually rose 1.5 percent.
Revlon, by far the market leader in nail color, suffered a 17.8 percent decline. The number-two nail polish brand — Maybelline — slipped 1.9 percent, while third-ranked player Sally Hansen grew 4.8 percent.
Tanya Mandor, executive vice president of Revlon’s Brand Equity Development Group, said, “We can look at it and think that nobody wants nail enamel. That is not true.”
“What has happened,” said Mandor, “is that the 10-to-13-year-olds have fallen out of the market. It is not the adult user.” Those girls have moved on to the next thing, she said, which happens to be “beaded bracelets.”
“We don’t have an unhealthy category; what we have is a category that is adjusting to an unusual circumstance and a disruption,” said Mandor.
There are other trends in nails now taking hold that could lift the market, noted Mandor. Products with unusual texture, shine and shimmer are capturing women’s attention. There is also more emphasis on polish for toes. Revlon has several promotions planned through yearend that it hopes will excite women.
“We want to make it interesting so that she will want to change her nail enamel [often],” said Mandor. “We do expect sales to pick up in the fourth quarter.”
Coming in November is the Crystal Reflection promotion, which will contain four shade ranges — Glow (pinks), Glam (lavenders), Glitz (ice tones, such as white and blue) and Calm (khaki shades). In December, Color Zing, featuring “reflective colors,” similar to car paints, will be on counter.
Orly is shipping a collection of reflective polishes this fall called Millenium Madness, featuring a silver that looks like aluminum foil.
Anne Martin, manager of global cosmetics marketing at Procter & Gamble, speaking about Cover Girl brand, said its efforts have focused on bringing new textures and concepts to the category, such as Crackle Lacquer. Crackle is a three-step process that delivers a shattered glass look. Next up is “Peelers,” a polish designed to be peeled off, instead of taken off with polish remover.
There have also been several developments in treatment items that could spark interest in home manicures.
Orly has introduced Sec’n Dry, a salon product, to the mass market. It is a clear top coat that penetrates the color coat and helps dry all the layers more quickly, to a hard finish. Orly already has had success with Smudge Fixer, an item designed to remove nicks in polish.
Sally Hansen rolled out Teflon Tuff, a protective top coat made with Teflon, and will launch Mega Shine in January, designed to deliver a diamond-like finish.
At Maybelline, efforts continue in color. Its Medieval-themed Venus Gold promotion, a collection of shimmery shades, will be out for holiday. And for the millennium, the company will offer 2000 Lights, a promotion featuring a range of shimmery champagne and pale shades, along with 2000 Nights, a collection of deep reds and plum.
Ketan Patel, vice president of marketing at Maybelline, said the collections were designed to provide women “a look to bring in the New Year.
“This is the year people will really want to step out in style,” he added.
And Revlon’s Mandor expects polish will play a major role in completing those holiday looks.
“She is going to be going out and getting dressed and partying,” said Mandor, “And nail enamel is part of head-to-toe dressing.”